Stormwater Retention Credit Certification, Trading, … Retention Credit Certification, Trading, and...

Stormwater Retention Credit Certification,

Trading, and Use

Department of Energy and Environment

Training Objectives

Understand how the Stormwater Retention Credit

(SRC) trading program can help restore the

District’s waterbodies

Understand how SRCs may be a cost-effective

option for complying with the District’s stormwater

regulations

Understand how properties can generate revenue

by installing green infrastructure

Be able to analyze the financial return from

potential SRC projects and participate in the SRC

program

Training Outline

Stormwater Runoff and Green Infrastructure

Using SRCs to comply with District requirements

Generation of SRCs

Eligibility, maintenance requirements, and certification

Buying and selling SRCs

SRC Price Lock Program

SRC Aggregator Startup Grant Program

SRC Site Evaluation Program

DOEE facilitation of the market and SRC market status

Benefits of SRC program to District waterbodies

Training Outline - Continued

Break

Financial Return on SRC Projects

Stormwater Database

Submitting SRC Program Applications

SRC and Offv Registry

Group Activity

Stormwater Runoff and Green

Infrastructure

43% of the District’s land is impervious.

A single 1.2-inch storm produces about 525 million gallons of stormwater runoff.

Imperviousness in the District

Combined Sewer system $2.6B+ capital project

Largely funded by rate payers

MS4 $7B+ green

infrastructure (GI) build-out

$10M/year public investment

Cost of the Problem

MS4

MS4

MS4

CSS

9

Green Infrastructure Retrofits

Retain stormwater runoff, reducing pollution

Essential for long-term restoration of waterbodies

Green Roofs

Bioretention Cells

Rainwater

Harvesting

(non-potable)

1

Most regulated development in the District is redevelopment;

trading was essential to implementing regulations.

Large construction/redevelopment sites install GI to control runoff

(called the Stormwater Retention Volume, or SWRv)

Scale of development makes it biggest driver of retrofits and key

part of the solution:

Total area retrofitted with

retention via DOEE direct

investment annually

Total area subject to SWM

regulations annually

(15 Mill SF - @ 1% of land)

10 .

:

Regulations Key to MS4 Stormwater Solution

2013 Stormwater Rule

Major land-disturbing activity

5,000 ft2 or more of land-disturbing activity.

Major substantial improvement activity

Renovation for which two conditions are met:

Cost exceeds 50% pre-project value of structure, and

Combined footprint of structure and land disturb ≥ 5,000 ft2.

Example:

$500,000 renovation of a $1,000,000 structure

4,000 ft2 building,1,000 ft2 of land disturbance or

5,000 ft2 building, 0 ft2 of land disturbance

Stormwater Retention Volume

The runoff that must be retained by the regulated

site is called the Stormwater Retention Volume

(SWRv)

This is calculated using the required storm size

for the site

1.2 inches for Major Land Disturbing Activities

0.8 inches for Major Substantial Improvement

Activities

This may be retained through a combination of

on-site and off-site retention

Stormwater Retention Volume (SWRv)

SWRv = P (RvI*%I + RvC*%C + RvN*%N)*SA*7.48 / 12

SWRv = Volume required to be retained (gal) P = 1.2 inches (90th percent rainfall event for the District) RvI = 0.95 (runoff coefficient for impervious cover)

RvC = 0.25 (runoff coefficient for compacted cover)

RvN = 0.0 (runoff coefficient for natural cover)

%I = % of site in impervious cover %C = % of site in compacted cover %N = % of site in natural cover SA = Surface area (square feet)

Impervious Surface = 14,000 sf SWRv = 10,000 gal.

Equation for a Major Land Disturbing Activity

Anacostia Waterfront Development Zone

Sites within the AWDZ that receive District

government funding have additional requirements:

Major Substantial Improvements have to retain

stormwater from the first 1.0” of rainfall

All sites have to treat stormwater from the first

1.7” of rainfall

Using Stormwater Retention

Credits

On-site retention ≥ 50% of Stormwater

Retention Volume (SWRv).

Free to go off site.

On-site retention < 50% of SWRv.

Must prove that on-site retention is

technically infeasible or environmentally

harmful.

Allowable Use of Off-Site Retention

Impervious Surface = 14,000 sf SWRv = 10,000 gal.

On-site minimum = 5,000 gal.

Offv = SWRv - On-Site

Retention

Volume

10,000

gallons

5,000

gallons

5,000

gallons

Off-Site Retention Volume (Offv)

Two Options to Achieve Offv

Stormwater Retention Credits (SRCs)

Privately tradable.

1 SRC corresponds to 1 gallon of retention for 1 year.

1 SRC achieves 1 gallon of Offv for 1 year.

Each SRC has a unique serial number.

Buyer and seller negotiate price ($2.07 12-month average).

You can also generate your own SRCs.

In-lieu fee (ILF) payment

Paid to DOEE.

Corresponds to 1 gallon of retention for 1 year.

Achieves 1 gallon of Offv for 1 year.

Adjusted annually for inflation (current price = $3.61)

On-site vs. Off-Site Compliance

On-site compliance costs/benefits include:

The cost to design and install GI on-site

The cost to maintain GI on-site

Opportunity costs associated with lost space for other

amenities

Off-site compliance costs/benefits include:

SRC trading prices ($2.07) or the ILF price ($3.61)

Opportunities to generate SRCs from a voluntary GI

project or by exceeding a regulatory requirement for

another site

Potential time-saving in permitting and construction

SWRv = 10,000 gal.

On-site minimum = 5,000 gal.

On-site retention = 7,000 gal.

Offv = 3,000 gal.

Impervious surface =

14,000 sf

Calculating Cost to Achieve 3,000 gal Offv

In-Lieu Fee SRCs

Annual =$3.61 * 3,000

=$10,830

= SRC Market Cost * 3,000

=$6,210 (if cost = $2.07)

5 years =5 * $3.61 * 3,000

=$54,150

= 5 * SRC Market Cost * 3,000

=$31,050 (if cost = $2.07)

Calculating Cost to Achieve Offv

Construction

Offv

Compliance

Required

DOEE Final

Construction

Inspection

Approved

SWMP

with Offv

Timeline for Achieving Offv

Construction

Submit

SRCs/ILF

Offv

Compliance

Required

≥ 4 weeks

DOEE Final

Construction

Inspection

Approved

SWMP

with Offv

Period of Compliance


Maintain Offv

Compliance

* To receive a Final Approval Notice, regulated sites must submit an As-Built SWMP and proof of meeting any Offv obligation.

Final

Approval

Notice*

Construction

Submit

SRCs/ILF

Offv

Compliance

Required

≥ 4 weeks ≥ 4 weeks

DOEE Final

Construction

Inspection

Approved

SWMP

with Offv

Maintain Offv

Compliance

Repeat

Submit

SRCs/ILF

Period of Compliance Period of Compliance


Achieving Offv

The Stormwater Management Plan (SWMP)

states the Offv, but not how the Offv will be met

SRCs / ILF due at Final Construction Inspection

Offv is an ongoing obligation that can be:

Met annually or on a multiyear basis

Met with a mix of SRCs/ILF (and the mix can change)

Reduced in the future by installing additional retention

If a site lapses in compliance with Offv:

DOEE assesses the ILF and a 10% late fee

DOEE will take enforcement action

Use of SRCs

SRCs can be banked indefinitely

1-year lifespan begins when SRCs are used

Generally – no limits on use of credits based on

watershed

AWDZ sites using non-Anacostia SRCs must use 1.25

SRCs per gallon of Offv

Maintenance failure at SRC-generating sites does

not invalidate SRCs purchased from that site

Original owner of the SRCs is responsible for replacing

the lost retention capacity

An SRC owner can retire SRCs

Generation of SRCs

31/13

Major Land

Disturbing

Retention Volume Eligibility: Stormwater Retention Credits (SRCs)

0.8” Storm

1.2” Storm

1.7” Storm

SRC

s

SRC

s

Pre-project

retention Voluntary

Major Substantial

Improvement

Type of Activity Installing Retention Capacity

Rete

nti

on

Vo

lum

e

SRC

s

REGULATED SITES

Reduce runoff by installing GI voluntarily or in

excess of a regulatory requirement

Generating SRCs

Generating SRCs

Reduce runoff by installing GI voluntarily or in

excess of a regulatory requirement

Obtain DOEE approval of a Stormwater Management

Plan

Project must be located in the District

Project must be installed after May 1, 2009

Pass DOEE’s construction and maintenance

Inspections

Provide a maintenance contract or plan for the

period of SRC certification

You can receive SRCs for up to 3 years at a time

Property used for SRC-retrofits not permanently

obligated to that use:

• No maintenance covenant required for SRC-generating

retention capacity.

• Retention capacity must be maintained for time period for

which DOEE certifies SRCs.

• Maintenance obligation can be ended by forfeiting SRCs or

purchasing SRCs for DOEE to retire or paying ILF.

Failure to maintain retention capacity for time of SRC

certification results in:

• DOEE requires retention volume to be compensated for.

• DOEE may take enforcement action.

• No additional certification of SRCs.

Maintenance Requirements

DOEE Final

Construction

Inspection

and Approval

Notice

Approved

SWMP

Construction

Timeline for Generating SRCs

DOEE Final

Construction

Inspection

and Approval

Notice

Approved

SWMP

Construction


Apply

for SRCs

≤ 6

months

DOEE Final

Construction

Inspection

and Approval

Notice

Approved

SWMP

Construction


Apply

for SRCs

Receive

3 years

of SRCs

≤ 6

months

Period of SRC Certification

DOEE Final

Construction

Inspection

and Approval

Notice

Approved

SWMP

Construction


Apply

for SRCs

Receive

3 years

of SRCs

≤ 6

months


DOEE

Inspection

≤ 6

months

DOEE Final

Construction

Inspection

and Approval

Notice

Apply

for SRCs

Receive

3 years

of SRCs

Approved

SWMP

≤ 6

months

Receive

3 years

of SRCs

Period of SRC Cert.

DOEE

Inspection

Construction


≤ 6

months

Apply

for SRCs

Repeat

≤ 3 months


Overview of SRC Certification Process 1) Design and receive DOEE approval of SWMP (review fees apply).

2) Install retention capacity

3) Pass DOEE final construction inspection

4) Apply for certification of SRCs, including:

1) As-built SWMP

2) For period of certification, submit maintenance contract or

documentation of ability/expertise

5) Receive up to 3 years’ worth of SRCs

6) Maintain retention capacity and pass inspections

7) After 3 years, apply for additional SRCs, including:

1) For period of certification, maintenance contract or documentation of

ability/expertise

8) Receive up to 3 years’ worth of SRCs.

-----Repeat 6-8 indefinitely--------

Year of

Application

Year of

Certification

Number of

SRCs

Total SRCs Cumulative

SRCs

Year 1

Year 1 1,000

3,000 3,000 Year 2 1,000

Year 3 1,000

Year 4

Year 4 1,000

3,000 6,000 Year 5 1,000

Year 6 1,000

Year 7

Year 7 1,000

3,000 9,000 Year 8 1,000

Year 9 1,000

Certification of Additional SRCs

Year of

Application

Year of

Certification

Number of

SRCs


SRCs

Year 1

Year 1 1,000

3,000 3,000 Year 2 1,000

Year 3 1,000

Year 4

Year 4 1,000

3,000 6,000 Year 5 1,000

Year 6 1,000

Year of

Application

Year of

Certification

Number of

SRCs


SRCs

Year 1

Year 1 1,000

3,000 3,000 Year 2 1,000

Year 3 1,000

20140101-A18-01400-000001

20140101-A18-01400-000002

20140101-A18-01400-000003

…

20140101-A18-01400-000998

20140101-A18-01400-000999

20140101-A18-01400-001000

Beginning of

certification year

(yyyymmdd) -

Major & Sub

drainage

(A,R,P & 2 digits)

SWMP number

(5 digits)

Individual gallon

of capacity

(6 digits) - -

Unique Serial Number for Each SRC

20140101-A18-01400-000001 through 20140101-A18-01400-001000

20150101-A18-01400-000001 through 20150101-A18-01400-001000

20160101-A18-01400-000001 through 20160101-A18-01400-001000

20170101-A18-01400-000001 through 20170101-A18-01400-001000

20180101-A18-01400-000001 through 20180101-A18-01400-001000

20190101-A18-01400-000001 through 20190101-A18-01400-001000

Beginning of

certification year

(yyyymmdd) -

Major & Sub

drainage

(A,R,P & 2 digits)

SWMP number

(5 digits)

Individual gallon

of capacity

(6 digits) - -

Unique Serial Number for Each SRC

Example SRC Transaction

Grocery parking lot voluntarily retrofits w/4,000 gal GI

practice to generate 3 years of SRCs or 12,000 SRCs.

Church parking lot voluntarily retrofits w/2,000 gal GI

practice to generate 3 years of SRCs or 6,000 SRCs.

Regulated site has 3,000 gal Offv and purchases total of

18,000 SRCs to achieve Offv for 6 years.

By end of 6-year period, regulated site purchases

additional SRCs.

Process for Buying and Selling Credits

1. Negotiate terms of transfer/contract between

buyer and seller

• Template contract available at doee.dc.gov/src

2. Submit application for transfer of SRC ownership

• DOEE will process application and provide

confirmation

DOEE tracks price information for transfers and

makes this public – but does not provide

project/contact information associated with prices

DOEE-Funded Projects

DOEE limits SRC certification for projects that

DOEE Funded

DOEE certifies 50% of SRCs and withholds the

other 50%

Once the withheld 50% multiplied by the average

selling price = the total value DOEE provided,

DOEE will certify 100%

Year SRC

Eligibility

SRCs

Certified

SRCs

Withheld

Average

Price

Value

Recouped

Value

Recouped

to Date

1 1000 500 500 $1.5 $750 $750

2 1000 500 500 $2 $1000 $1750

3 1000 500 500 $2 $1000 $2750

4 1000 500 500 $1.5 $750 $3500

5 1000 500 500 $1 $500 $4000

6 1000 500 500 $2 $1000 $5000

7 1000 1000

8 1000 1000

9 1000 1000

Year SRC

Eligibility

SRCs

Certified

SRCs

Withheld

Average

Price

Value

Recouped

Value

Recouped

to Date

1 1000 500 500 $1.5 $750 $750

2 1000 500 500 $2 $1000 $1750

3 1000 500 500 $2 $1000 $2750

4 1000 500 500 $1.5 $750 $3500

5 1000 500 500 $1 $500 $4000

6 1000 500 500 $2 $1000 $5000

DOEE-Funded Project Example

DOEE provides $5,000 for a BMP with 1,000

gallons of SRC eligibility

Year SRC

Eligibility

SRCs

Certified

SRCs

Withheld

Average

Price

Value

Recouped

Value

Recouped

to Date

1 1000 500 500 $1.5 $750 $750

2 1000 500 500 $2 $1000 $1750

3 1000 500 500 $2 $1000 $2750


DOEE is purchasing SRCs at fixed rates

Eligible GI must be new, voluntary, and in the

MS4

Participants also have the option to sell on the

market

Option to sell to DOEE provides certainty about

the revenue from an SRC-generating project

Effectively constitutes a price floor

DOEE has made an initial commitment of $11.5

million to purchase SRCs

SRC Price Lock Program – Purchase Prices

Location SRC Purchase Price, Years 1

through 6

SRC Purchase Price, Years 7

through 12

Non-Tidal MS4 $1.95 $0.40

Tidal MS4 $1.70 $0.40

CSS N/A N/A

DOEE offers a price for the first 6 years of SRC

certification that is expected to help recover

construction costs

DOEE offers a price for the subsequent 6 years

that is expected to help cover maintenance costs

Participants may negotiate a higher selling price

on the market

SRC Price Lock Program - Process

Apply online through the Stormwater Database

Review and sign an SRC Purchase Agreement,

which contains the purchase price and other

terms

Obtain DOEE approval for SWMP

Construct green infrastructure, passing DOEE

inspection

Submit as-built SWMP

SRC Price Lock Program - Process

Apply for SRC Certification for 3 years

Choose whether to sell on the market or sell to DOEE

To sell to DOEE, you must submit an Intent to Sell

SRCs form within 1 year of the SRC certification

date.You can sell your SRCs to DOEE in two separate

transactions within the 1-year period

Maintain green infrastructure through the period of

SRC certification

Repeat the above steps for 12 years of SRC

certification

After 12 years, you can continue to generate

SRCs to sell on the market, but you will not be

able to sell these SRCs to DOEE

SRC Price Lock Program Application

Preliminary (30%) design of proposed green

infrastructure

Narrative description

Map or aerial view

Plan view sketch and cross section

Preliminary volume calculation

Letter of support from property owner (if different

from SRC seller)

Cost estimate


All $11.5 million is held in an escrow account

DOEE reserves the necessary funding for each project

to ensure it is available at the time of the sale

Program is opt-in

There are no penalties if you do not generate and sell

SRCs to DOEE, but this may result in expiration of the

SRC Purchase Agreement

DOEE’s grantee, the Center for Watershed

Protection, helps DOEE with administration of

SRC Purchase Agreements

SRC Aggregator Startup Grant

Program


DOEE offers grants of up to $75,000 to assist

SRC-aggregating businesses with preliminary

technical and outreach work

Desktop assessment of prospective sites

Outreach to property owners

Field assessment/analysis of prospective sites

Preliminary design of green infrastructure

Grants are administered by DOEE’s grantee, the

Center for Watershed Protection

Can only be used to fund preliminary work on

new, voluntary green infrastructure in the MS4

SRC Aggregator Startup Grant – Process

Apply for SRC Aggregator Startup Grant

Review and Sign SRC Aggregator Startup Grant

Agreement

Conduct the technical and outreach work funded

by the grant, submitting invoices for work

completed

Submit Final Project Report

Consider installing the SRC-generating green

infrastructure and apply for the SRC Price Lock

Program

SRC Site Evaluation


Protection, will evaluate green infrastructure

opportunities

Will only be used to evaluate opportunities for new,

voluntary green infrastructure in the MS4

Sites must have at least 0.5 acres available

Evaluations are provided directly to property owners

Properties interested in green infrastructure can

also work with SRC-aggregating businesses

SRC Site Evaluation - Process

Apply for SRC Site Evaluation Program

If selected, schedule an evaluation with CWP

Review SRC Site Evaluation

You may meet with CWP to discuss the evaluation if

desired

Consider installing the SRC-generating green

infrastructure and apply for the SRC Price Lock

Program

DOEE Facilitation of the Market

and Market Status

DOEE Facilitation of the SRC Market

Website, Stormwater Database, SRC and Offv

Registry - doee.dc.gov/src


SRC Aggregator Startup Grant Program


Contract template for SRC transfers

Discussion Board – hootboard.com/srcprogram

GIS viewer for impervious areas

Financial Return Calculator

SRC Market Data (11/17/2017)

SRC trades

• 23 trades overall

• 122,643 SRCs purchased

• $248,627 in sales

• 13 trades YTD at average $2.07/SRC

Demand

• Approximately 11% of regulated sites (51 projects) have

opted to meet some of their retention obligation off-site

• 336,600 gallons of Offv

• 23 projects have completed construction (or within 4 weeks)

• 16 are purchasing SRCs (73,298 SRC/year)

• 5 are generating their own SRCs (61,201 SRCs/year)

• 2 are paying ILF (2002 gallons/year)

• Additional 200,099 gallons/year permitted or under

construction

SRC Market Data (11/17/2017)

Benefits of the SRC program to

District Waterbodies

Trading’s Potential to Increase Retention

Same retention for 1.2” storm:

10,000

gallons

Strict On-Site Trading

5,000 + 5,000 =

10,000

gallons

Greater retention for storms smaller than 1.2”

Example – 0.6” storm:

90% of storms in Washington DC are less than 1.2”.

This scenario yields ~50% increase in annual retention.

5,000 gallons

Strict On-Site Trading

5,000 + 5,000 =

10,000 gallons

Trading’s Potential to Increase Retention

Benefits to District Waterbodies

Increased annual

retention District-wide.

Increased capture of first-

flush volume.

Shift retention BMPs to

most vulnerable

tributaries and improve

socioeconomic outcomes.

Financial Return Calculator

SRC Financial Return Calculator

Estimates the potential SRC eligibility and ROI

Designed with many end-users in mind

Engineers

Aggregators

Property owners

Allows user to have high-level or granular project

information

Uses assumptions to fill in missing or incomplete

project data

SRC Financial Return Calculator

Example Project: SRCs at 1600 Pennsylvania Ave

Voluntary project participating in DOEE’s Price

Lock Program

Large site with ample impervious area

30,000 ft2 project area

24,000 ft2 of impervious area in CDA

3,000 ft2 standard bioretention installation

…change some inputs to view the outcomes

Stormwater Database and SRC

Registry

Create a Stormwater Database Account

Visit the database landing page at

doee.dc.gov/swdb

Request an account (DOEE will approve request)

Create log in credentials

DOEE communications may be sent from

[email protected]

Submit a Stormwater Management Plan

Required for projects that: Apply for certification of SRCs

Apply to use SRCs to meet a SWRv

Trigger stormwater retention requirements

Entered during plan review process Attend General Compliance or Stormwater Database

training for more information

Not required for to: Buy and resell SRCs

Buy and retire SRCs

Apply for SRC Site Evaluation or SRC Aggregator Startup

Grant

Apply for SRC Price Lock Program (though you do need to

provide preliminary green infrastructure design)

SRCs and ILF Forms

SRC Aggregator Startup Grant Application

SRC Site Evaluation Application

SRC Price Lock Program Application

Certify SRCs

Transfer SRCs

Intent to Sell SRCs (SRC Price Lock Program)

Use SRCs

ILF Notification

Retire SRCs


Application

Application Review

Within two weeks, you will receive an email

regarding a decision on your application

Log back into the Stormwater Database in order to

sign your SRC Aggregator Startup Grant

Agreement

SRC Site Evaluation Application

Application Review

Within two weeks, you will receive an email


The Center for Watershed Protection will contact

you to schedule the site evaluation


Application

Enter preliminary design, attach documents

You will need to provide initial information about

the Site Drainage Areas and BMPs that are

proposed for the project. This information is used

to estimate the SRC eligibility of the project.

The project engineer should be able to provide this

information

The format of entry in the Stormwater Database is

similar to that of SWMPs and will form the basis of

your subsequent SWMP submittal

Application Review

Within four weeks, you will receive an email


Log back into the Stormwater Database in order to

sign your SRC Purchase Agreement

Certify SRCs

SRC Eligibility Example

Site has a SWRv of 1,200 gallons

2 BMPs retain a total of 1,700 gallons

SRC eligibility = 500 gallons

Which BMP(s) should generate SRCs?

BMP 1

1,000

gallons

BMP 2

700

gallons

BMP 1 BMP 2

0 500

1 499

2 498

… …

498 2

499 1

500 0

Approval confirmation.

SRC serial numbers.

RiverSmart Rewards

When you apply for SRC Certification, you will

also be prompted to apply for RiverSmart Rewards

SRC aggregators can submit RiverSmart Rewards

applications on behalf of site owners (the discount

is paid to site owners via the water bill)

This is an easy way to receive an additional

financial incentive for an SRC-generating project

Transfer SRCs

Intent to Sell SRCs (SRC Price

Lock Program)

DOEE’s Payment for your SRCs


Protection (CWP) will provide payment for SRC

sold through the SRC Price Lock Program

After DOEE receives proof of payment from CWP,

DOEE will retire the SRCs

Use SRCs

In-Lieu Fee Notification

Retire SRCs

SRC Registry

Group Activity

Matthew Espie

[email protected]

202-715-7644

For more information about the SRC Program, visit

doee.dc.gov/src

To access DOEE’s Stormwater Database, visit

doee.dc.gov/swdb

For DOEE’s stormwater management regulations and

related information, visit

doee.dc.gov/swregs

Additional Information

Stormwater Retention Credit Certification, Trading, … Retention Credit Certification, Trading, and...

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